Dear Shareholders,

We have strategically built a diversified and de-risked business model that spans the entire value chain. Today, we are a formidable leader in the steel, energy, and mineral sectors, poised to capitalize on new growth opportunities. Moreover, our consistent efforts in developing our minerals and energy businesses have further positioned us to expand to newer horizons of growth.

Economies worldwide including China, continue to face significant macroeconomic challenges, prolonged interest rate reversals by central banks, ongoing conflict between Israel and Hamas, high fuel costs, and disruptions in seaborne transport due to attacks in the Red Sea. Despite these headwinds, the Indian economy remains resilient, buoyed by robust tax collections and increased dividends from the RBI, which have boosted the government finances. This increased government expenditure is expected to drive capital-intensive projects and stimulate the infrastructure sector, thereby boosting demand for steel.

India’s steel industry is also poised for sustained growth. In FY 2023-24, the country produced approximately 144 million tons of crude steel, marking a 14.5% increase compared to the previous year. This contrasts sharply with the negative growth of 1.66% in China and the global growth rate of 3.48%. Domestic finished steel consumption also grew by 13% to 136 million tons, supported by government-led infrastructure initiatives. The Indian steel sector’s expansion is underpinned by focused government spending on infrastructure and a resurgence in private investment. During 2023-24, India exported 2.65 million tons of ferro alloys. Thermal and coking coal import saw a sharp rise on back of lower prices.

Building on this economic landscape, in 2023-24, the company achieved revenue of ₹ 3,868 crores, compared to ₹ 4,212 crores in 2022-23. This decline is primarily due to lower selling prices year-on-year. Consequently, profit after tax declined from ₹ 603 crores in 2022-23 to ₹ 531 crores in 2023-24, reflecting pressure on margins. Despite these challenges, our operational performance reached new heights. We recorded the highest ever production of coal, iron ore pellets, billets, wire rod, ferro alloys, and captive power. However, hydro power generation was lower by 10% due to reduced rainfall in catchment areas and shut down for maintenance in our Uttarakhand project. On the export front, we shipped 115,000 metric tons of ferro alloys worth ₹ 875 crores, compared to 98,000 metric tons worth ₹ 983 crores in 2022-23.

Looking ahead, we are taking strategic steps to ensure long-term sustainable margins. These initiatives include productivity improvements, the installation of a solar power project, waste utilization projects, replacing all TG sets with energy-efficient models, and substituting high cost imported coal with captive coal. The benefits of these efforts will be reflected in the medium to long term, positioning us for sustainable growth and enhanced profitability.

During 2023-24, our Gare Palma coal mine operated at full capacity, producing 1.44 million tons of coal. We have successfully received environmental clearance to increase the mining capacity to 1.68 million tons, with the CTE and CTO expected soon. We aim to further boost this capacity to 1.80 million tons within the current financial year. To meet the increased inhouse coal requirements following the proposed acquisition of SKS Power, we plan to elevate the mining capacity to 5.20 million tons. The acquisition of SKS Power, a 600-megawatt operational thermal power plant near our coal mine in Raigarh, Chhattisgarh, will create significant operational synergies.

In tandem with these expansions, we propose to increase the capacity of our coal washery from 0.96 million tons to 1.80 million tons initially, with further increases planned as needed to match our growing mining capacity. To optimize the movement of coal and mine refilling materials, we have planned railway siding and related infrastructure at the coal mine, ensuring cost effective transportation.

Our Indonesian joint venture coal mine produced 5.58 lakh metric tons of coal in FY 2023-24 and 2.24 lakh metric tons in the last quarter. We anticipate production to reach approximately 1 million tons in FY 2024-25.

We have made significant progress with the Shahpur West underground coal mine in Madhya Pradesh. Stage 1 forest clearance and environmental clearance have been received, and we expect to receive Stage 2 forest clearance and the mining lease shortly. Mine development work will commence immediately after obtaining the necessary permissions, positioning us to meet 100% of our high-grade coal requirements from this captive mine, thus shielding us from price fluctuations and the high cost of imported coal.

Additionally, we are advancing the mining plan preparation and approval process for the Kalyani coal mine in Chhattisgarh. We have also formed a joint venture subsidiary company to reopen and operate the Bartunga Hill high-grade coal mine of SECL, further strengthening our presence in commercial coal mining.

Regarding the Surjagarh-1 iron ore mine, we have received a letter of intent for a composite license from the Government of Maharashtra. We are currently securing the necessary approvals, including forest clearance, to commence prospecting work.

These strategic initiatives underscore our commitment to expand our minerals business, ensuring long-term operational synergies, and achieving sustainable growth.

We are pleased to report significant progress in our energy business. For our solar power project, we have acquired the necessary land, and materials have begun arriving on-site. The process for grid connectivity approvals is underway, and we anticipate the plant will be operational by the end of this financial year. In line with our commitment to energy efficiency, we have placed an order to replace our existing 30-megawatt turbine and generator (TG) set with a new, energy-efficient TG set. This upgrade is expected to be operational in the first half of FY 2027. Our 25 MW Rehar hydropower project is progressing ahead of schedule. We expect the plant to be operational in the next quarter, allowing us to benefit from part of this year’s rainy season, well ahead of the scheduled completion in March 2025. These developments underscore our strategic focus on expanding our energy portfolio.

By integrating solar power for captive consumption, we aim to significantly reduce our carbon footprint at our manufacturing facilities. Our key strategies include utilizing solar energy, harnessing waste heat, and converting waste materials into valuable products, all of which contribute in making our processes less carbon intensive and reinforce our commitment to ESG and sustainable practices. Additionally, we are dedicated to community development, employee welfare, and strong corporate governance. These values are essential in building and maintaining lasting relationships with our stakeholders. Through these ongoing efforts, we strive to drive positive impact and sustainable growth, ensuring long-term value creation for all our stakeholders

Looking ahead, we are poised to leverage these advancements to drive further growth and value creation. Our strategic initiatives and ongoing efforts will continue to build a stronger, more resilient organization, capable of navigating the complexities of the global market while delivering long-term benefits to our stakeholders. Our committed team of professionals are aligned with the organization’s vision and will continue to remain the cornerstone of our growth, in the years to come. We extend our heartfelt gratitude to our valued shareholders, esteemed customers, dedicated employees, and supportive partners for their unwavering trust and collaboration. Together, we will continue to broaden our horizons and achieve new levels of excellence.